Senator seeks to end free phone program

Friday

Jun 21, 2013 at 10:20 PM

U.S. Sen. David Vitter is pushing to end a federal program that provides free cellphones for low-income Americans.

Chance RyanStaff Writer

U.S. Sen. David Vitter is pushing to end a federal program that provides free cellphones for low-income Americans. "This phone program has expanded far beyond its original intent, and as so many middle-class Americans struggle underneath this economy, it is really offensive for Washington to make taxpayers pay for free cellphones for others," Vitter, R-La., said.In March, Vitter introduced his legislation as an amendment to the Senate budget resolution. The amendment failed 46-53. He also introduced the legislation as an amendment to the Farm Bill, but a vote was blocked earlier this month by Senate Majority Leader Harry Reid, D-Nev.The Lifeline program was created in 1984 and is administered by the Universal Service Administration Co. to expand phone service for qualifying, low-income Americans. The program supporting mobile phones was expanded in 2008 to include wireless service providers. The wireless program has grown from $143 million in 2008 to nearly $2 billion in 2012. Vitter wants to end the provision that relates to the cellphone portion of the fund.To qualify for Lifeline, you need an income at or below 135 percent of the federal poverty level. Also, you qualify if you are a participant in any of a number of federal assistance programs such as Medicaid or Supplemental Security Income or if you live in Section 8 housing. Lifeline is supported through Universal Service fund fees that telephone companies pass on to consumers on their monthly bills. Generally, the charge is about $2.50 on consumers' monthly phone bills, about 40 cents of which actually goes into the Lifeline program. The Federal Communications Commission doesn't require this charge to be passed on to customers, but it helps phone companies recover their Universal Service costs. So the fee is technically not a tax but a subsidy overseen by the FCC. In Louisiana, nearly 800,000 low-income families participate in the Lifeline program, according to Tracfone, a Lifeline mobile phone provider. Vitter says the program is a considerable waste of money, and even the program's supporters have admitted it has suffered from waste and fraud. Likewise, last year, the FCC toughened Lifeline's eligibility standards and created a database to ensure that multiple companies were not receiving subsidies to provide service to the same customer. Those reforms trimmed $200 million from the program last year and are on track to save $400 million this year, according to the FCC.Jose Fuentes, a spokesman for Tracfone, said the majority of Lifeline recipients are seniors, veterans and people going through tough times. Fuentes said the company is working with leaders in Washington, D.C., who are rightly concerned about protecting the program from fraud, waste and abuse. All and all, Fuentes said Lifeline is creating a pathway out of poverty. "If the government would create more jobs and opportunities, people would be able to get out of poverty, and they wouldn't need Lifeline," he said.Local residents expressed mixed opinions about the program on Facebook.Ashmore Vicente agrees with the Lifeline program because it helps people who need the phones; however, she said the "abuse needs to be stopped." Joe Watson said he is in favor of continuing the program so long as it is helping the intended recipients. "Like so many other programs to help the less fortunate it has been turned into an entitlement program," he said.Matt Russo said it's unfortunate that phone service providers add fees to consumers' bills which are donated to other phone companies that provide the cellphones. "So your communications company gets a tax incentive for the donation," he said. "It's a perfect example of corporate welfare."The Lifeline program needs to end, Russo said."Not only does it create dependency, but it's a market distortion created by government, which causes all of us to pay more for service," he said.

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